SEAL BEACH : Council OKs Plan to Recoup Investment

Council members this week unanimously approved one of the county investment-pool settlement plans after City Manager Jerry L. Bankston said the city would receive 82% of its $2.06 million by June 5.

By deciding in favor of Option A in the settlement agreement crafted by the Pool Participants Committee, council members Monday night rejected two other options that allow litigation but decrease or eliminate guaranteed settlement amounts.

If the county settlement agreement wins approval by April 17 from 80% of the investors who hold 90% of investment-pool assets, it will be sent to federal bankruptcy court for approval. Within 16 days of court approval, the city would receive 76%, or $955,900, of funds still on deposit in the bankrupt county investment pool. The city has already received $618,000 of investment pool funds from an emergency funding request.

The city would receive another 4% of its funds, or about $75,298, in recovery notes that the county has pledged to make “easily convertible” to cash. By June 5, the city should receive about 82% of its funds remaining in the pool, or about $1.1 million, Bankston said. Recovery of the remaining 18% would be contingent on the success of county litigation and other county investments.

Bankston said that under the terms of the settlement agreement, the city could eventually end up with 104% of the funds originally on deposit with the county, for a total of $2.1 million, due to accumulated interest.